At face value the recent weakness in commodity prices, culminating in August’s slump, is consistent with a global recession almost as severe as that in 2008-09. Investor sentiment towards the sector has also deteriorated even further. But while ample supply will keep many prices subdued, concerns about a collapse in demand look exaggerated. Some improvement in confidence was already seen towards the end of last month, with oil prices in particular snapping back. Better news from China should therefore allow the prices of key industrials to recover further over the rest of the year.
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